State of Arizona Office of the Auditor General · 2017-12-21 · State of Arizona Office of the Auditor General ... tial information and specific recommendations to improve th e operations

State of Arizona

Office of the

Auditor General

PERFORMANCE AUDIT WILDLIFE MANAGEMENT

PROGRAM

Report to the Arizona Legislature By Debra K. Davenport

Auditor General

ARIZONA

GAME AND FISH COMMISSION AND

DEPARTMENT

May 2001 Report No. 01-08

The Auditor General is appointed by the Joint Legislative Audit Committee, a bipartisan committee composed of five senators and five representatives. Her mission is to provide independent and impar-tial information and specific recommendations to improve the operations of state and local government entities. To this end, she provides financial audits and accounting services to the state and political subdivisions and performance audits of state agencies and the programs they administer.

The Joint Legislative Audit Committee

Senator Ken Bennett, Chairman Representative Roberta L. Voss, Vice-Chairman

Senator Herb Guenther Representative Robert Blendu Senator Dean Martin Representative Gabrielle Giffords Senator Tom Smith Representative Barbara Leff Senator Randall Gnant (ex-officio) Representative James Sedillo Representative James Weiers (ex-officio)

Audit Staff

Melanie ChesneyManager and Contact Person (602) 553-0333 Natalie CoombsTeam Leader Cathleen AkersTeam Member Nancy CameronTeam Member

Jay De PreeTeam Member

Copies of the Auditor Generals reports are free. You may request them by contacting us at:

Office of the Auditor General 2910 N. 44th Street, Suite 410

Phoenix, AZ 85018 (602) 553-0333

Additionally, many of our reports can be found in electronic format at: www.auditorgen.state.az.us

http://www.auditorgen.state.az.us

2910 NORTH 44th STREET SUITE 410 PHOENIX, ARIZONA 85018 (602) 553-0333 FAX (602) 553-0051

DEBRA K. DAVENPORT, CPA AUDITOR GENERAL

STATE OF ARIZONA OFFICE OF THE

AUDITOR GENERAL

WILLIAM THOMSON DEPUTY AUDITOR GENERAL

May 9, 2001

Members of the Arizona Legislature The Honorable Jane Dee Hull, Governor Mr. Duane Shroufe, Director Arizona Game and Fish Department Transmitted herewith is a report of the Auditor General, A Performance Audit of the Arizona Game and Fish Commission and DepartmentWildlife Management Program. This report is in response to a June 16, 1999, resolution of the Joint Legislative Audit Committee. The performance audit was conducted as part of the Sunset review set forth in A.R.S. 41-2951 et seq. I am also transmitting with this report a copy of the Report Highlights for this audit to provide a quick summary for your convenience. As outlined in its response, the agency agrees with all of the findings and recommendations. My staff and I will be pleased to discuss or clarify items in the report. This report will be released to the public on May 10, 2001. Sincerely,

Debbie Davenport Auditor General Enclosure

Program Fact Sheet

SgaPcolifstpr

(est.)

Arizona Game and Fish Commissionand Department

Wildlife Management Program

ervices: The Wildlife Management Program, which consists of Game Management, Non-me and Endangered Wildlife, and Sportfish Management, offers the following services: 1)

roviding wildlife hunting and recreational opportunities to the public; 2) Assessing habitat nditions and enforcing regulations to conserve and restore nongame and endangered wild-e populations; 3) Producing, stocking, and maintaining sportfish in Arizona lakes and reams; 4) Issuing hunting and fishing licenses and tags; and 5) Providing wildlife education ograms to the public.

F
Program Revenue: $41,360,600 (fiscal year 2001, estimated)
$0$10,000,000$20,000,000$30,000,000$40,000,000$50,000,000

1999 2000 2001

OtherEarnings on investmentsLottery proceedsIntergovernmentalLicenses and permits

OFFICE OF THE AUDI

Personnel: 543.5 (fiscal year 2001)

Sportfish Management subprogram (199)

Game Managementsubprogram (238)

Nongame and Endangered Wildlife subprogram (106.5)

W

acilities:

PHOENIX

TOR GENERAL

ildlife Management Program Mission:

To provide fish and wildlife benefits and compatible public uses through diverse and cooperative wildlife management, while avoiding adverse impacts to habitat. To pro-tect wildlife populations, habitats, and public safety, and to increase public awareness and understanding of wildlife resources and the Department.

Summary of Program Goals (fiscal years2000-2001): 1. To maintain and/or restore the natural

diversity of Arizonas game, nongame,and endangered wildlife populations.

2. To maintain or enhance distribu-tion/abundance of cold and warm watersportfish.

3. To increase public awareness of Ari-zonas sportfishing resources and non-game and endangered fish and wildlife.

4. To provide recreational opportunities.

Adequacy of Performance Measures: The Wildlife Management Programs 18 per-formance measures appear to be reasonably aligned with its mission and goals. How-ever, the Program currently does not have performance measures to address all aspects of its subprograms mission statements. For example, new performance measures are needed to address: Game-wildlife habitat and diversity un-

der the Game Management subprogram;

Non-game wildlife and fish habitat and recreational opportunities under the Nongame and Endangered Wildlife

T

Rm

Bm

Tm

Tm

Am

Equipment: The Wildlife Management Programs assets total more than $75.6 million. Included in this amount are the Programs six largest as-sets:

guns, microscopes, s

rucks worth approxi-mately $8.9 million

adios worth approxi-ately $1.3 million

oats worth approxi-ately $1.2 million

railers worth approxi-ately $863,000

ractors worth approxi-ately $561,000

ircraft worth approxi-ately $399,000.

subprogram; and

Distribution, abundance, and diversity of cold and warm water sportfishes and their habitats under the Sportfish Man-

Other assets: all-terrain vehicles, generators,

OFFICE OF THE AUDITOR GENERAL

agement subprogram.

nowmobiles, and tools.

i


SUMMARY The Office of the Auditor General has conducted a Sunset review of the Arizona Game and Fish Commission and Department and a performance audit of the Arizona Game and Fish Depart-ments Wildlife Management Program pursuant to a June 16, 1999, resolution of the Joint Legislative Audit Committee. This audit was conducted as part of the Sunset review set forth in Arizona Revised Statutes 41-2951 et seq. This Sunset review of the Commission and Department was conducted in conjunction with a separate performance audit of the Commission Heritage Fund (Auditor General Report No. 01-09). The Heritage Fund provides a substantial amount of revenue to the Wildlife Man-agement Program and these monies are used to support a num-ber of activities, including endangered species protection and reintroduction efforts. Although the Heritage Fund itself is not subject to Sunset laws, Heritage Fund management is a critical Department function and was assessed as part of this Sunset au-dit. Therefore, this report includes information about the Heri-tage Fund in the Sunset Factors (see pages 25 through 34). The Arizona Game and Fish Department (Department) and Commission were established in 1929 to set hunting and fishing regulations and manage wildlife. The Commission oversees the Department and is responsible for setting wildlife regulations and policies. The Department implements Commission policies and carries out day-to-day activities such as wildlife manage-ment and research, law enforcement, and public information and education. This audit includes two findings, one with recommendations di-rected toward the Legislature, and the other with recommenda-tions to improve Department operations.

Summary

ii


Specific Decisions Needed to Help Address Elk Population and Habitat Concerns (See pages 9 through 17) Because no single agency is responsible for managing both elk population numbers and habitat in Arizona, conflicts arise over the number of elk the Department manages in the State, and the impact those animals have on lands owned and managed by others. Higher elk numbers can lead to increased hunting oppor-tunities and license revenues. However, elk numbers concern ranchers because elk compete with cattle for available forage, or food, on federal, state, and private lands. In addition, when for-age conditions are poor, the U.S. Forest Service, which manages most elk habitat in Arizona, can reduce or eliminate cattle on Forest lands, but cannot influence wildlife numbers. Private landowners also have concerns because elk can damage fences and crops. Efforts by various interest groups to resolve these inherent con-flicts have not yet resulted in a comprehensive approach for managing forage resources. Consequently, the Legislature should consider formally bringing together key decision-makers from all interest groups, and charging them with addressing critical problems and reaching consensus on specific decisions needed to manage the issues. This task forces activities should include: Developing comprehensive forage management plans that

establish forage use objectives for wildlife and cattle in sum-mer and winter habitats, and during drought conditions;

Establishing forage measurement and monitoring methods

that are acceptable to both land managers and the Depart-ment;

Forging agreements for actions to take when there is insuffi-

cient forage; Developing a mechanism for cooperatively identifying areas

that may need time to recover from either livestock or wild-

Summary

iii


life use, and establishing responsibility for rehabilitating those areas; and

Recommending to the Legislature appropriate tools to ad-

dress depredation on private property, and feasible methods for addressing competition for forage between livestock and wildlife on federal and state trust lands.

Department Needs to Better Manage Dealer License Sales (See pages 19 through 24) The Department needs to better manage retail sales of hunting and fishing licenses to ensure that it collects all monies owed to it in a timely manner. Retail sales of hunting and fishing licenses and hunting tags are a critical source of revenue for the Depart-ment, generating approximately 23 percent of its $41 million Wildlife Management Program budget. However, the Depart-ments procedures for managing retail, or license dealer sales, are inadequate in the following areas: RecordkeepingThe Department lacks comprehensive,

readily available information about the amount license deal-ers owe or have paid the Department, and whether dealers have met statutory deadlines for reporting sales and return-ing unsold expired licenses. Further, the information the De-partment has is often conflicting. For example, depending on which of the billing records auditors reviewed for one dealer, he owed either $171 or $266. However, a manual payment log shows this dealer has a zero balance, but does not indi-cate how much was paid or when. To resolve these prob-lems, the Department needs to develop a single source of ac-cessible, up-to-date payment and billing information.

Year-end dealer auditsThe Department audits dealers

annually to ensure that they pay for or return all licenses is-sued to them for sale. However, the Department allows some dealers to delay making final payments for months. For ex-ample, one dealer who owed $10,000 in January 1999 was al-lowed to delay paying in full for eight months. To help en-sure prompt reporting on both a monthly basis and at year-

Summary

iv


end, the Department should seek enforcement options, such as penalties and late fees.

CollectionsWhen dealers do not pay, the Department is

sometimes slow to initiate collection efforts. For example, one dealer should have returned approximately $9,500 worth of licenses in January 1999. The dealer did not respond to an April 1999 request for payment, but the Department let seven months pass before sending a follow-up letter. In the mean-time, the Department sent this dealer licenses to sell for the next license year, which the dealer also failed to return. When the Department finally initiated collections action in April 2000, this dealer owed more than $15,600. To ensure timely collections in the future, the Department needs to establish a time frame for initiating collections action efforts against dealers who fail to return licenses or report sales, improve its ability to identify these dealers, and initiate collection actions in a timely manner.

Sunset Factors (See pages 25 through 34) The Sunset Factors include some additional recommendations to improve Department operations, and also assess the Depart-ments management of the Game and Fish Heritage Fund. The Heritage Fund provides substantial revenues to the Department to fund a variety of wildlife-related activities and projects. Con-sequently, the Departments management of the Fund is as-sessed in the Sunset Factors, even though the Fund itself is not subject to Sunset laws (see also Auditor General Report No. 01-09). Recommendations to improve other Department operations in-clude a listing of rules the Department should develop to help it better implement wildlife management, and off-highway vehicle and watercraft statutes. Also, the Department needs to ensure that it fully complies with its current administrative rule for issu-ing licenses to retail sales outlets in a timely manner.

v


TABLE OF CONTENTS Page Introduction and Background........................... 1 Finding I: Specific Decisions Needed to Help Address Elk Population and Habitat Concerns................ 9 Competing Interests Lead to Conflicts over Elk............................................................... 10 Despite Efforts of Department and Others, Key Issues Still Not Resolved ................................................................... 11 Recommendations.................................................................. 17 Finding II: Department Needs to Better Manage Dealer License Sales ................................................. 19 License Dealers Generate Significant Revenues.............................................................. 19 Efforts to Manage Retail Sales and Collect Revenue Are Inadequate ........................................ 20 Recommendations.................................................................. 24 Sunset Factors.................................................... 25

Table Table 1 Arizona Game and Fish Department Wildlife Management Program Statement of Revenues and Expenditures Years Ended or Ending June 30, 1999, 2000, and 2001 (Unaudited)............................. 6

Table of Contents

vi


TABLE OF CONTENTS (Concld) Page

Figure Figure 1 Elk Habitat Ownership (Estimated)........................................................... 12

Photos Photo 1: Black-footed Ferret............................................. 3 Photo 2: Rocky Mountain Elk.......................................... 9

1 OFFICE OF THE AUDITOR GENERAL

INTRODUCTION AND BACKGROUND The Office of the Auditor General has conducted a Sunset review of the Arizona Game and Fish Commission and Department and a performance audit of the Arizona Game and Fish Depart-ments Wildlife Management Program pursuant to a June 16, 1999, resolution of the Joint Legislative Audit Committee. This audit was conducted as part of the Sunset review set forth in Arizona Revised Statutes (A.R.S.) 41-2951 et seq. In the early 1880s the Territorial Legislature established the Ari-zona Fish Commission in response to growing concerns over the unrestricted depletion of wildlife. The Arizona Fish Commission initially consisted of three commissioners charged with enforcing the few existing conservation laws as well as stocking desirable species of fish. At the time, the Territorial Legislature established fishing and hunting laws, as well as seasons and harvest limits. As these laws grew more complex, it became apparent that the State needed a specialized agency with the authority to establish hunting and fishing regulations and manage wildlife. Conse-quently, in 1929, the Legislature established the present-day Ari-zona Game and Fish Department (Department) and Commis-sion. Arizona Game and Fish Commission and Department Responsibilities The Arizona Game and Fish Commission is the oversight body responsible for setting regulations and policies designed to pro-vide Arizonas citizens with quality hunting, fishing, and wild-life-related recreational activities. The Department implements the Commissions policies, and assists the Commission in fulfill-ing its statutory responsibilities, including: Developing broad policies and long-range programs for

wildlife management, preservation, and harvest;

Introduction and Background

2


Establishing hunting, trapping, and fishing rules and meth-ods for taking wildlife;

Enforcing laws that protect wildlife; Establishing programs for the management of nongame,

endangered, and threatened wildlife; and Providing educational programs for the general public. The Commission and Department share a common mission:

To conserve, enhance, and restore Arizonas diverse wildlife resources and habitats through aggressive pro-tection and management programs, and to provide wildlife resources and safe watercraft and off-highway vehicle recreation for the enjoyment, appreciation, and use by present and future generations.

Organization and Staffing The Commission is composed of five members appointed by the Governor pursuant to A.R.S. 38-211. Commissioners serve staggered five-year terms, set policy, and hire a director to su-pervise the Department and ensure that Commission policies are implemented. The Department is divided into three main pro-gram areas: Wildlife Management, Off Highway Vehi-cle/Watercraft Management, and Administration. This perform-ance audit reviewed the Wildlife Management Program only, which employs approximately 91 percent of the Departments 600 total full-time equivalent (FTE) employees. The Wildlife Management Program has three subprograms: Game Management (238 FTEs)This subprogram pro-

vides wildlife hunting and recreational opportunities to the public. In doing so, it manages animals that are actively hunted, such as deer, bear, elk, turkey, quail, and duck. Game management includes inventorying game populations, enforcing hunting rules and regulations, and assessing habi-tat conditions. Additionally, it is involved in evaluating for-

Wildlife Management Program employs ap-proximately 544 FTEs.


OFFICE OF THE AUDITO

merly occupied habitat for potential reintroduction of game species.

Nongame and Endangered Wildlife (106.5 FTEs)This

subprograms activities include assessing habitat conditions and enforcing regulations to conserve and restore wildlife populations that are not typically hunted. These efforts serve reptiles, amphibians, mammals, birds, mollusks, and crustaceans. This subprogram also oversees Department projects for particular species that the U.S. Fish and Wildlife Service has determined require speciagame project involves refooted ferrets in Arizona. from the State in the 1930s.

Sportfish Management

serves an estimated 515,885stocking, and maintainingstreams. To help accompliduce an estimated 2.5 milliobass, and catfish. In additi

The U.S. Fish and Wildlife Serviceprotection efforts based on populatio

CandidateSpecies

A species withknown or suspectedhabitat or popula-tion threats.

ThreSp

A speciein imminof beingfrom its likely tendangeforeseeab

Photo 1: Black-footed Ferret

3 R GENERAL

l protection. One ongoing non--establishing endangered Black-These animals were eliminated

(199 FTEs)This subprogram anglers each year by producing, sportfish in Arizona lakes and sh this, its seven hatcheries pro-n fish each year, including trout,

on, it oversees an urban fishing

identifies species that require specialn threats. Designations include:

atenedecies

s that is notent danger

eliminatedrange but iso becomered in thele future.

EndangeredSpecies

A species that it is inimminent danger ofelimination from itsrange.


4


program that involves stocking and maintaining fish in ur-ban lakes, such as those in city parks.

Wildlife Management staff, including approximately 150 commissioned peace officers, are located throughout the State in the Departments six regional offices and the central administrative office in Phoenix. Regional offices, at the locations shown on the map, enable staff to become familiar with the wildlife and habitat in specific areas, and to better enforce wildlife and boating laws. In addition, these offices serve the public lo-cally by selling hunting and fishing licenses, accepting and ad-dressing complaints about issues such as nuisance wildlife, and providing information about regional recreational activities. Follow-Up to 1991 Sunset Review This audit includes an assessment of whether the Department has implemented recommendations made during the previous review of Wildlife Management Program activities (Auditor General Report No. 91-10). The 1991 report included recommen-dations for changes to wildlife management efforts in the follow-ing three areas: Controversial wildlife management issuesAuditors rec-

ommended that the Department strengthen its research on nongame species to increase the amount of information available to public land managers. The recommendation has been implemented. Currently, the Department maintains a database with information about special status nongame spe-cies that is used to help assess whether public, state, and pri-vate land projects need to include efforts to mitigate damage to those species. In addition, auditors recommended that the

PHOENIX



Department increase its efforts to address controversial wild-life management issues. Although it has made efforts to re-solve landowner and rancher concerns, conflicts relating to elk continue. Because the Department alone cannot resolve the issues, the Legislature should consider taking action to involve all concerned parties in developing solutions (see Finding I, pages 9 through 17).

Planning and evaluationAt the time of the last audit, the

Department was working to implement a comprehensive planning and evaluation process to govern its activities, and the audit recommended that these activities continue. Since then, the Department has worked to integrate its strategic and operational plans. It has also centralized responsibility for collecting and maintaining annual work plans developed by program and regional staff. In addition, the Department has implemented a Total Quality Leadership program that involves teams who work to address specific operational is-sues.

StaffingThe 1991 audit also found that the Department re-

gional supervisors were responsible for overseeing too many staff, and the Department implemented the recommendation to develop additional supervisor positions.

Funding and Budget The Wildlife Management Program, like the Department as a whole, does not receive any General Fund monies. Instead, in fiscal year 2000 the program received approximately $16.4 mil-lion, or nearly 40 percent, of its $41.8 million in revenues from the sale of hunting and fishing licenses, tags, and stamps. A por-tion of these monies, as well as most of the $13.7 million received predominately from federal grants, was used to fund game and sportfish management. Nongame projects receive funding mainly through the Heritage Fund. The Heritage Fund, which received approximately $8.1 million in fiscal year 2000, is derived from state lottery revenues and is not appropriated. Other sources of revenue include donations and income tax check-off monies (see Table 1, page 6).

The program does not receive any General Fund monies.


6


Table 1

Arizona Game and Fish Department Wildlife Management Program 1

Statement of Revenues and Expenditures Years Ended or Ending June 30, 1999, 2000, and 2001

(Unaudited)

1999 2000 2001

(Actual) (Actual) (Estimated) Revenues:

Licenses and permits $15,631,766 $16,407,582 $18,940,000 Intergovernmental 11,810,061 13,733,304 12,403,900 Lottery proceeds to the Heritage Fund 8,706,250 8,096,800 7,340,600 Earnings on investments 1,337,334 1,523,392 1,100,400 Private gifts, grants, and donations 658,900 1,333,581 915,000 Sales and charges for goods and services 358,307 447,116 270,500 Fines and forfeits 200,849 154,162 166,000 Other 312,937 145,835 224,200

Total revenues 39,016,404 41,841,772 41,360,600 Expenditures:

Personal services 18,228,729 18,169,729 18,629,400 Employee related 5,097,518 4,797,968 4,857,600 Professional and outside services 2,837,997 2,143,900 1,682,500 Travel, in-state 800,619 711,063 725,800 Travel, out-of-state 197,270 198,665 142,200 Other operating 7,341,871 7,302,939 12,667,100 Equipment 7,215,507 7,150,862 2,144,100

Total expenditures 41,719,511 40,475,126 40,848,700 Excess of revenues over expenditures (2,703,107) 1,366,646 511,900 Net operating transfers in 781,863 562,312 Excess of revenues and transfers in over (under) ex-

penditures and transfers out (1,921,244) 2 1,928,958 511,900 Fund balance, beginning of year 25,707,310 23,786,066 25,715,024 Fund balance, end of year 3 $23,786,066 $25,715,024 $26,226,924

1 The Department does not entirely account for revenues and expenditures by program. Consequently, amounts for 1999, 2000, and 2001 includes Departmental administration costs (Administrative Program) and a portion of the Off-Highway Vehicle/Watercraft Management Program. Revenues and expenditures for the Administration Program are estimated to be $1,240,400; $1,362,600; and $1,590,200 for 1999, 2000, and 2001, respectively, and the portion of Off-Highway Vehicle Water-craft Management Program revenues and expenditures included in the Statement is estimated to be $867,100; $1,893,300; and $1,942,100, respectively.

2 In 1999 the Department used nearly $2 million of the available fund balance in the Game and Fish Fund to pay for 1999 operations; consequently, the Department experienced a significant excess of expenditures over revenues for that year.

3 Includes the Heritage Fund, which accounted for over $20 million of the ending fund balance for all years presented. Source: Auditor General staff analysis of the Arizona Financial Information System (AFIS) Revenues and Expenditures by Fund,

Program, Organization, and Object and Trial Balance by Fund reports for the years ended June 30, 1999 and 2000, and the Departments fiscal year 2002 and 2003 Budget Request for the 2001 estimates.



Audit Scope and Methodology During the course of this audit, auditors assessed several Wild-life Management Program activities before focusing on two areas involving elk management and retail license and tag sales. Other activities reviewed included such things as the Departments current efforts to process big game tag applications, enforce wildlife laws, conduct research, and manage its fisheries pro-gram. These activities appear to be well managed, based on a preliminary review. However, auditors did identify several is-sues associated with the Departments management of the Heri-tage Fund, and these are reported in a separate audit (Auditor General Report No. 01-09). This audit report includes two findings: The need for the Legislature to establish a small formal task

force to help address concerns about the States elk popula-tion (see Finding I, pages 9 through 17); and

The need for the Department to more effectively and effi-

ciently manage retail license sales to ensure that it collects all monies owed to it in a timely manner (see Finding II, pages 19 through 24).

In addition, this report presents responses to the 12 statutory

Sunset factors (see pages 25 through 34), including informa-tion about the Departments management of the Heritage Fund. Information about Heritage Fund management is in-cluded as part of the Departments Sunset Review since the Fund provides substantial revenues to the Department and pays for a number of wildlife-related activities and projects. The Heritage Fund itself, however, is not subject to Sunset laws.

Auditors used a number of research methods for this review. Specifically, To research issues and concerns relating to the States

elk populationAuditors interviewed Department man-agement and staff to assess how the number of elk in the State is estimated, and what it has done to mitigate concerns


8


of land managers, private property owners, and interest groups. Auditors also received input from legislators and spoke with numerous outside interest groups and commit-tees, including the U.S. Forest Service; Arizona State Land Department; the legislative Natural Resources Discussion Group; the Governors Rangeland Technical Advisory Coun-cil; and the Arizona Cattle Growers about their elk manage-ment concerns. In addition, information was obtained from the Rocky Mountain Elk Foundation. Auditors also reviewed statutes and rules from Arizona and other surrounding states, including Colorado, New Mexico, Nevada, and Utah. Finally, auditors contacted wildlife managers in some of these states about their efforts to address land manager and interest groups concerns.

To determine whether the Department was appropriately

managing retail license salesAuditors interviewed De-partment staff responsible for managing and monitoring re-tail license sales through license dealers. Auditors also re-viewed statutes, rules, policies, and procedures governing dealers, and reviewed records for a random sample of 29 dealers to determine whether these dealers had met these re-quirements. In addition, to assess the accuracy of payment records and the Departments efforts to collect monies, audi-tors reviewed available records for another 20 dealers who appeared to either owe the Department money or be due a refund for 1998 license sales, the most recent year for which complete information was available.

This audit was conducted in accordance with government audit-ing standards. The Auditor General and staff express appreciation to the Ari-zona Game and Fish Commission Chairman and members, the Director of the Arizona Game and Fish Department, and staff for their cooperation and assistance throughout the audit.

FINDING I SPECIFIC DECISIONS NEEDED TO HELP ADDRESS ELK POPULATION AND HABITAT CONCERNS During the course of this audit, there was legislative and public interest regarding the Departments management of the States elk population. The Department is responsible for managing thousands of elk that inhabit federal, state, and private lands. The number of elk in the State has been a long-time concern be-cause of their impact on private property and forage, or food, that is also used by cattle and other wildlife, such as deer. In an attempt to address these concerns, numerous studies have been conducted, and discussion groups and committees have been established, but consensus has not been reached on key issues.

Consequently the Legislature should consider establishing a small, formal task force with a mandate to address specific resource management issues. Efforts to establish elk herds in Arizona began in 1913 when an initial herd of 86 Rocky Mountain elk were transplanted from Wyoming to the Sitgreaves National Forest. By 1935, the States elk herd was successfully established and could support regular elk hunts. Since then, the elk herd has continued to grow. According to Department estimates, in the late 1980s elk inhabited approximately 3.8 million acres. Since then, the Department estimates that elk have expanded their range to include approxi-mately 5 million acres of federal, state, and private land in Arizona. Population estimates following the 1999 hunts ranged between 25,300 and 28,300 elk, not including calves. The total population of elk prior to the 2000 hunts was estimated at ap-

Photo 2: Rocky Mountain Elk

Arizona was originally inhabited by Mer-riams elk, which became extinct in the late1800s. A close relative, the Rocky Mountainelk, was successfully introduced in 1913, andnow roams the States higher elevations.


proximately 38,000, which is reduced from a high of approxi-mately 48,000 in 1994, based on information provided by the De-partments regional offices.

Finding I

10


Competing Interests Lead to Conflicts over Elk No single agency is responsible for managing both elk popula-tion numbers and habitat, and this contributes to conflicts over the number of elk in the State and their use of federal, state, and private lands. For example, the Department is responsible for managing the elk population and does this through public hunts. However, other agencies and individuals manage and use elk habitat, and they indicate that fewer elk could result in less dam-age to private property and reduced competition between elk, cattle, and other wildlife for forage on federal and state trust lands. Larger elk herds benefit sportsmenThe Department is respon-sible for managing the States elk population through setting

hunting quotas and regulations. Currently, there is a high level of interest in elk hunting in Arizona, and the De-partment receives a substantial amount of revenue from hunters. Between 1990 and 1999, the number of elk hunt-ing permits available to sportsmen increased by ap-proximately 10,000; however, demand still far exceeds the number of permits available. In 1999, approximately 95,000 sportsmen sought to obtain one of the 23,345 elk hunting permits issued that year. Elk permit sales and associated application fees generated approximately $1.9 million for the Department in 1999. Each permit allows hunting in one or more designated parts of the State,

called management units. Most of the units where elk hunting is allowed, shown at left in blue, are concentrated in the Apache-Sitegreaves, Coconino, and Tonto National Forests. Elk compete with other land users interestsAlthough the De-partment is responsible for managing the elk population, it does not manage most of the States elk habitat. This results in con-flicts between the Department and other groups such as U.S. Forest Service land users and private landowners because of the negative impacts elk can have. For example, ranchers who use U.S. Forest Service lands to produce livestock find that the size of their herds is restricted when the amount of forage is not suffi-cient to feed both the elk and livestock. The amount of available

Elk Hunting Areas

Finding I


forage is impacted by a number of variables, including such things as drought and the needs of endangered species. When the Forest Service determines that available forage is low, Forest Service managers direct ranchers to reduce the number of cattle on the range, but cannot control the number of elk that also use the land. Ranchers have expressed frustration with this situa-tion because they perceive that they are required to take action when forage is in poor condition, but the Department is not re-quired to take action to reduce the elk population. For example, in certain areas of the Tonto National Forest drought conditions have caused cattle numbers to be reduced by 50 percent or more in recent years. In other areas, cattle have been excluded entirely; however, some of these areas still show heavy use, which is at-tributed to elk. Private landowners have also expressed concerns about the damage elk cause to such things as fences, crops, and gardens. Although most elk habitat is managed by the Forest Service, there is the potential for significant elk numbers on state and pri-vate lands that border or are interspersed with federal forest lands. This is particularly the case in the winter, when snow forces elk to move to lower elevations where a greater percent-age of elk habitat is privately owned (see Figure 1, page 12). In addition, numerous elk spend the summer on reservation land, and the reservations may manage these elk herds with different population goals than the Department. When these management goals conflict, such as when reservation authorities manage for higher elk populations, surrounding landowners may be ad-versely affected. Despite Efforts of Department and Others, Key Issues Still Not Resolved In recent years numerous efforts have been made to address elk-related concerns; however, these efforts have not yet resulted in a comprehensive approach to managing forage. Over the past 12 years, the Legislature, the Department, the Governor, the Ari-zona State Land Department, and others have initiated a

Elk can damage property.

Finding I

12

OFFICE OF THE AUD

number of committees anissues. However, consensusuch as how to measure orthese types of broad-basereach a consensus on specfor areas heavily impacted Efforts have been made tober of studies have been chave been established to related concerns. The Depin many of these groups, own. Some studies and codress specific issues, and e The Big Game Ranchin

torily established in 19ing a program to help

Elk Ha

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

SummerU.S. Forest Ser

Source: Auditor General staff sment from its Geograpthat numbers are based

Figure 1

bitat Ownership (Estimated)

Wintervice Private State Other

ummary of information provided by the Depart-hic Information System. The Department indicates on 1988 mapping efforts.

ITOR GENERAL

d activities focused on elk and habitat s has not yet been reached on issues allocate forage in the State. To resolve d issues, key interest groups need to ific management goals and objectives by elk use.

address concernsSince 1989, a num-onducted, and committees and groups address habitat management and elk-artment has been an active participant and has also established projects of its mmittees have been established to ad-xamples of these efforts include:

g Study Committee, which was statu-89 to study the feasibility of establish-ranchers and landowners recover costs

Finding I


associated with big game on their property. The Committee recommendations specific to its charge included such things as compensating landowners for setting aside habitat for big game and establishing a special fund to help pay for fencing or other items to prevent property damage by big game. These recommendations have not been fully implemented, and may require further study or legislative action;

The Department is currently working in cooperation with the

U.S. Forest Service to study forage usage on 3 of the 29 elk management units in the State. In one of these units, a formal agreement has been established to allocate available forage between cattle and wildlife. The Department is responsible for managing wildlife numbers based on their use of allo-cated forage;

The Governors Rangeland Technical Advisory Council, es-

tablished in 1999, was charged with assessing how the Forest Service measures and allocates forage throughout the State. The report was completed in January 2001, and recom-mended increased consistency in measuring and monitoring forage usage on U.S. Forest Service lands;

The Forage Resource Study Group, lead by the State Land Department, has ongoing studies of forage availability on approximately 450,000 acres of land that serve as elk winter habitat. The State Land Department indicates that winter elk habitat in Arizona is limited and is more likely to be privately or state owned, and these factors need to be considered when determining elk population goals; and,

The University of Arizona has received limited funding to assess Arizonas plant production via satellite to help deter-mine how much forage is available in the State.

In addition to efforts to address specific concerns, committees have been formed to discuss broader-based habitat issues. For example, the Department has established Habitat Partnership Committees to identify and discuss local habitat concerns. Local landowners and users can also use the committees as a forum to provide input into the Departments hunt recommendations. Al-though the committees have identified several habitat improve-

Finding I

14


ment projects, they do not generally appear to focus on issues such as forage measurement and monitoring. Another group created to address habitat issues is the Natural Resources Discus-sion Group, which was informally established in the mid 1990s by the Speaker of the House. The group includes members of land management agencies, land users, the Department, and sportsmen. While the group brings together key interest groups, its discussions still indicate that there is distrust among these groups about issues such as how the elk population in Arizona is estimated. Current efforts are important, but key issues remain unre-solvedAlthough various groups have worked to address par-ticular elk-related issues and have made progress in some areas, conflicts over how to manage forage and depredation, or wildlife damage, continue. One reason may be that although some of the current study groups and committees represent various interests, they may have a limited focus. In other cases, they may lack the ability or authority to affect both elk and elk habitat manage-ment. In addition, existing groups or committees have either not been mandated to address key issues, or they have not success-fully fulfilled their mandate. Key issues that still need to be re-solved include: Comprehensive forage resource managementNone of

the groups have been charged with reaching consensus on how to manage the States forage resources. To manage for-age comprehensively, land management agencies, land us-ers, and the Department need to agree on matters such as how to measure and monitor forage in both summer and winter habitats, and during drought conditions. Specifically, these groups need to set measurable objectives for managing forage and reach agreements about actions ranchers and the Department will take when there is insufficient forage. In ad-dition, key interest groups need to agree on how to identify areas that may need time to recover from livestock or wildlife use and who should be responsible for rehabilitating those areas.

Depredation on private propertyCommittee efforts have

not significantly increased options for addressing wildlife depredation on private property. One of the few existing op-tions is a statutory provision that allows for a special depre-

Specific issues need to be resolved.

Finding I


dation hunt to remove animals in areas where they are caus-ing problems. However, during the past ten years the Com-mission has not successfully launched such a hunt. Further, the Departments ability to provide materials that may bene-fit landowners, such as fencing to protect crops from wildlife, is limited. This issue was discussed in the Big Game Ranch-ing Study Committees recommendations, but it is not clear whether the Committee considered how materials could be provided in compliance with the Arizona Constitution.

The Constitution prohibits gifts of state money or property, so materials such as fencing can only be provided to land-owners if the Department identifies a corresponding benefit to wildlife, or if it retains the title to the materials. For exam-ple, in some cases, the Department has lent fencing materials to landowners to protect crops for a limited time, but the ma-terials must be returned. In addition, when a project can be shown to benefit wildlife, the Department has helped land-owners to develop water sources and has provided such things as fertilizer to improve habitats.

Although the Constitution limits the types of compensation the Department can offer landowners, this issue could be revisited to determine whether other states programs could be modified and adopted here. For example, Colorado, Nevada, New Mexico, and Utah each allow landowners who have experienced problems with elk on their private property to receive hunting permits as compensation. Nevadas elk incentive tag program could potentially be adapted for Arizona. Nevada landowners agree to tolerate a particular number of elk on their property in exchange for one or more hunting permits. One option for landowners, which would not require a legislative change nor involve a gift, would be to increase the quality or quantity of wildlife on their property and then charge sportsmen a fee to hunt there.

Forage competitionA more comprehensive approach to forage management may reduce the conflict of competition between livestock and wildlife for forage on federal and state trust lands. As part of any comprehensive management plan, strategies that would enable livestock and wildlife to com-plement rather than compete with one another should be

Finding I

16


considered. For example, Colorado has begun a project on one state grazing allotment where cattle are used to improve the habitat for elk. The study involves using a rotational graz-ing plan where cattle are allowed to graze portions of the al-lotment early in the spring to remove old, dry forage that the elk are unlikely to eat. Cattle are then moved to another pas-ture, leaving the newly exposed plant growth available to elk. This practice is designed to benefit cattle by allowing them access to the range earlier, and to benefit elk by making new plant growth more accessible and by encouraging new plant growth. Another possibility that could be explored is whether ranchers who agree to defer grazing on federal and state trust lands could receive hunting permits as compensa-tion.

Consensus on critical habitat management issues is neededInterest group representatives, including those with ongoing projects, agree that a formal legislative task force could help to effectively resolve concerns about habitat and forage if it can reach a consensus on key issues. These representatives indicate that to be most effective, the task force should be kept small and include key decision-makers so that agreements and commit-ments can be made. In addition, any plans or formal recommen-dations that the task force develops should incorporate the re-sults of recent or ongoing studies where applicable. In addition, the task force should obtain input from the interest groups that are also working to address elk-related issues. Task force members should include legislators and representa-tives from the State Land Department, the Department, land-owners, ranchers, sportsmen, and scientists. In addition, partici-pation by key Forest Service decision-makers is critical to devel-oping comprehensive, effective solutions. Another important consideration would be to assign an Assistant Attorney General to the task force to assess recommendations and advise mem-bers. To perform its duties, the task force could also utilize the services of legislative staff and agency staff in appropriate fields. Finally, to give the task force sufficient time to reach consensus and to address long-term issues, the Legislature should consider establishing it on an ongoing basis.

Legislative task force should include key rep-resentatives.

Finding I


Recommendations The Legislature should consider establishing a small, formal, on-going task force mandated with developing a comprehensive plan for managing forage with specific agreed-upon objectives, and for recommending methods for mitigating private property damages and forage competition between wildlife and cattle. The task forces membership could include legislators, represen-tatives from the U.S. Forest Service, the State Land Department, the Department, landowners, ranchers, sportsmen, and scien-tists. The task force could also utilize the services of an Assistant Attorney General, legislative staff, and agency staff in appropri-ate fields, as well as the efforts of existing studies, groups, and committees to complete its duties, which should include devel-oping and reaching consensus on the following key issues: Comprehensive forage management plans that establish for-

age use objectives for wildlife and cattle on summer and win-ter habitats, and during drought conditions;

Forage measurement and monitoring methods that are ac-

ceptable to both land managers and the Department; Agreements for actions to take when there is insufficient for-

age; A mechanism for cooperatively identifying areas that may

need time to recover from either livestock or wildlife use, and establishing responsibility for rehabilitating those areas;

Recommendations to the Legislature about adopting the ap-

propriate tools to address depredation on private property; and

Recommendations to the Legislature about feasible methods

for addressing competition for forage between livestock and wildlife on federal and state trust lands.

18


(This Page Intentionally Left Blank)


LicenseRequired to hunt or fish. Some, such as urban fishing li-censes, are for specific locations or times.

TagRequired, in addition to a license, to harvest big game ani-mals, including antelope, bear, big-horn sheep, buffalo, deer, elk, javelina, mountain lion, and turkey.

StampValidates a license for particular purposes, such as hunt-ing waterfowl, or fishing with two poles.

FINDING II DEPARTMENT NEEDS TO BETTER MANAGE DEALER LICENSE SALES

The Department needs to better manage its process for issuing fishing and hunting licenses, and hunting tags through retail out-lets. Retail sales are a critical source of revenue for the Depart-ment, generating approximately 23 percent of its $41 million Wildlife Management Program budget. However, the Depart-ments recordkeeping and other procedures for managing retail outlet sales do not adequately ensure that the Department col-lects all monies owed to it in a timely manner. License Dealers Generate Significant Revenues The Department receives a substantial portion of its annual revenues from license, tag, and stamp sales to sportsmen. Most of those sales are through approximately 400 retail outlets known as license dealers. These dealers include large sporting goods stores as well as small mom-and-pop convenience stores. Together, these dealers collect about $9.4 million for the Department each year by selling hunting and fishing licenses and stamps and tags for particular big game species, including bear and mountain lion.1

1 The Departments offices also sell licenses, and are the exclusive source of

big-game tags except for bear, mountain lion, and archery deer and turkey. The Departments offices annually collect over $5 million.

Finding II

20


To receive and sell hunting and fishing licenses to the public, dealers must apply for and receive a Department dealer license. As part of their licensing agreement with the Department, deal-ers receive a 5 percent commission on sales and must report sales and remit monies monthly. In addition, dealers must return all unsold, expired licenses by January 10th for the previous license year, or pay the Department for the value of those licenses. Hunting and fishing licenses are generally valid for one calendar year, but the Department sends licenses to dealers in August to allow for advance sales. Efforts to Manage Retail Sales and Collect Revenue Are Inadequate The Department does not efficiently manage sales through deal-ers although they contribute a significant portion of the Wildlife Management Programs revenues. Records indicating the amounts that dealers owe or have paid are inadequate. In addi-tion, the Department is slow to finalize its year-end audit proc-ess, which can result in dealers delaying payments for several months. Finally, when dealers are slow to pay, the Department does not consistently initiate efforts through the Attorney Gen-erals Office to collect monies. Payment records are inadequateBased on the Departments records, it is difficult to determine whether dealers have met statutory reporting deadlines and whether they owe the De-partment money. License dealers are statutorily required to remit sales revenues to the Department by the 10th of each month, and must return any unsold licenses annually. If unsold licenses can-not be located, the dealer must treat them as if they were sold and pay the Department for them. The Department keeps mul-tiple records of dealers sales, payments, and monies owed, but there is not a single source of comprehensive information. Fur-ther, each of the Departments records is problematic: Computerized data must be manually compiled into an-

nual billing statementsUsefulness of the Departments computerized data of the amount and type of license stock sent to dealers and monthly payment records is limited. Spe-cifically, the system does not enable managers to identify

Finding II

OFFICE OF THE AUDITOR

which dealers have failed to report monthly sales. Staff com-pile and maintain this information manually. In addition, the system cannot compile a comprehensive year-end billing statement for each dealer. Instead, the system produces two separate statements: one showing how much dealers owe for unreturned license stock; and a second showing how much is due, or should be refunded, because dealers incorrectly re-ported monthly sales or miscalculated payments. The De-partment staff must manually compile both of these pieces of information into a year-end billing statement for approxi-mately 400 dealers.

Annual billing state-

ments do not clearly show payments or monies dueThe Departments annual billing statements are compiled manually and can be confusing. For ex-ample, as shown at right, when a dealer makes a partial payment, or returns some license stock, Department staff recalculate the new amount due and write it on the original statement and send it back to the dealer.

Handwritten payment log

amountsDuring the year-staff record payment informcate that during the year-endto-date payment record avaito be of little value since staand amounts of payments in

Auditors reviewed records for numerous recordkeeping probproblems were less serious, sucdate-stamp monthly reports to

21 GENERAL

lacks payment dates and end billing process, Department ation on a manual log. Staff indi- process, this log is the most up-lable. However, this log appears ff often do not record the dates it.

49 license dealers and identified lems and discrepancies. Some h as Department staff failing to show whether a dealer had re-

Finding II

22


ported on time, or an out-of-business dealer still being listed as active in the database. Other, more serious problems involved cases where records were not sufficient to determine which deal-ers still owed the Department money and how much was due. For example, one dealers file showed a balance due of $266 for 1998 license sales. A computerized billing statement, which does not include monies owed for unreturned licenses, showed that the dealer owed $171. However, the manual payment log con-tradicts both of these records, showing that this dealer has a zero balance. The logs accuracy cannot be verified, however, since it does not include an amount paid or a payment date. To resolve these problems, the Department needs to develop a single source of accessible, up-to-date payment and billing in-formation. The Departments computer system currently ap-pears to contain all of the information necessary to do this, but some additional programming is needed to produce compre-hensive billing reports. In addition, it needs to ensure that it ap-propriately date-stamps and maintains any necessary manual records, such as monthly dealer reports. Dealers allowed to delay year-end paymentsAlthough the Department audits dealers annually to ensure that they either return or pay for all licenses they receive, some dealers have been allowed to delay making final payments for several months. Af-ter the January 10th deadline for returning unsold licenses, the Department begins its audit process and bills those dealers for the value of all unreturned licenses. When a dealer returns a por-tion of the unsold licenses or makes a partial payment, the De-partment issues another bill and allows the dealer an additional 30 days to respond. Because the Department does not limit the number of times that it recalculates and resubmits bills, some dealers have delayed payments for several months. For example: One dealer who owed $10,000 in January 1999 was allowed

to delay paying in full for eight months. The dealer returned unsold licenses and made partial payments until September 1999, when the audit process was finally completed.

Another dealer who should have paid or returned licenses

worth $6,921 in January 1999 delayed making a final pay-ment for at least ten months.

Finding II


By statute, dealers license-selling privileges are automatically canceled if they do not return all unsold and expired licenses within 30 days of reporting deadlines. However, this statutory provision does not provide a practical solution for late reporting. To help ensure prompt reporting on both a monthly basis and at year-end, the Department should seek amendments to A.R.S. 17-338 and 17-339 to allow for enforcement options, such as penalties and late fees. In addition, the Department needs to im-plement a policy limiting the total amount of time, or the number of opportunities to respond, that a dealer will be allowed before formal collection or revocation efforts are initiated. Department does not always act quickly to collect monies dueWhen dealers do not pay, the Department does not always refer these cases in a timely manner to the Attorney Generals Office for collection. One reason is that the Department has not estab-lished deadlines for referring cases to the Attorney Generals Of-fice. Another reason appears to be because the Departments computerized database does not enable staff to efficiently iden-tify dealers who have not reported monthly sales or who have not made final year-end payments or returned unsold licenses. Instead, staff must review the dealers paper files to determine whether an account is current. This manual process may not identify all delinquent dealers and can result in costly delays. For example: One dealer who failed to pay continued to receive licenses to

sell. The dealer should have returned approximately $9,500 worth of licenses in January 1999. The dealer did not respond to an April 1999 request for payment, but the Department let seven months pass before sending a follow-up letter. In the meantime, the Department sent this dealer licenses to sell for the next license year, which the dealer also failed to return. When the Department finally initiated collections action in April 2000, this dealer owed more than $15,600.

Another dealers file indicates that the dealer still owes the

Department $324 for 1998 license sales. There is no evidence of payment, and the only documented effort to collect the money was a September 1999 letter the Department sent to the dealer.

Finding II

24


To help ensure collections efforts are initiated in a timely man-ner, the Department needs to establish a time frame for initiating collections efforts against dealers who fail to return licenses or report sales, and improve its ability to identify these dealers. Fi-nally, the Department needs to ensure that it initiates collection actions in a timely manner through the Attorney Generals Of-fice. Recommendations 1. The Department should further develop its computerized

licensing database into a comprehensive, accessible source of up-to-date payment and billing information.

2. The Department should ensure that needed manual records,

such as dealers monthly sales reports, are appropriately date-stamped and maintained.

3. The Department should seek amendments to A.R.S. 17-338

and 17-339 to establish enforcement options, such as penal-ties and late fees, to be assessed against dealers who do not meet deadlines for reporting sales, remitting monies, or re-turning unsold licenses.

4. The Department should establish and implement a policy

stating the total amount of time, or the number of opportuni-ties, that a dealer will be allowed to submit unsold licenses or payments before being referred to the Attorney Generals Of-fice for collection of outstanding monies.

5. To help ensure delinquent dealers are identified quickly, the

Department should program its computerized licensing da-tabase to identify dealers who have not submitted timely monthly sales reports and who have not responded in a timely manner to annual audits.


SUNSET FACTORS In accordance with A.R.S. 41-2954, the Legislature should con-sider the information contained in the following 12 factors in de-termining whether the Arizona Game and Fish Commission and Department should be continued or terminated. These 12 factors include information derived from this audit of the Arizona Game and Fish Department (Department) Wildlife Management Program, as well as information from a separate performance audit of the Game and Fish Heritage Fund (see Auditor General Report No. 01-09). Information about Heritage Fund manage-ment is included as part of the Departments Sunset Review since the Fund provides substantial revenues to the Department and pays for a number of wildlife-related activities and projects. The Heritage Fund itself, however, is not subject to Sunset laws. 1. The objective and purpose in establishing the

agency.

The Arizona Game and Fish Commission and Depart-ment were established in 1929 to oversee the manage-ment, preservation, and harvest of wildlife in Arizona. The Commission, which consists of five members, sets wildlife management policies and hires a Department di-rector to supervise the Department and ensure that Commission policies are implemented. In carrying out the Commissions directives, the Department performs a number of activities, including:

Assisting the Commission with establishing hunting

and fishing seasons and determining the number of public hunting permits to be issued each year;

Enforcing hunting and fishing laws; Managing game, nongame, and fisheries programs;

Sunset Factors

26


Performing wildlife research and managing habitat programs;

Providing wildlife information to the public through

education programs and outreach efforts; and

Enforcing watercraft and off-highway vehicle laws and registering boats.

In addition, the Department administers the Arizona Game and Fish Commission Heritage Fund, which is di-vided into five programs: public access; urban wildlife; environmental education; habitat evaluation and protec-tion; and identification, inventory, protection, acquisition, and management (IIPAM) of sensitive habitats. The Heri-tage Fund was established by voter initiative in 1990 and generates up to $10 million each year to benefit wildlife and their habitats (for further information, see Auditor General Report No. 01-09).

2. The effectiveness with which the agency has met its

objective and purpose and the efficiency with which the agency has operated.

The Commission, through the Department, has generally met its overall objectives and purposes. The Commission manages wildlife that are considered big game animals through public hunts that involved almost 131,000 sports-men in 2000. The Commission and Department are also involved in protecting and managing endangered and threatened species. For example, the Department reintro-duced the endangered Gila trout to Dude Creek near Payson, Arizona. The Department also gained recogni-tion for successfully breeding and releasing 63 endan-gered Black-footed ferrets into the wild.

However, this Sunset review identified some areas where the Departments operations could be made more effec-tive and efficient, including:

License SalesThe Department could more effi-

ciently manage its process for issuing hunting and

Sunset Factors


fishing licenses and permits through its retail outlets. The Department sells hunting and fishing licenses and permits through approximately 400 retailers, known as license dealers. These dealers collect a sub-stantial amount of revenue for the Department. How-ever, the Departments recordkeeping and other pro-cedures for managing retail outlet sales do not ade-quately ensure that it can determine how much money it is owed and collect it in a timely manner (see Finding II, pages 19 through 24).

License Time FramesAlthough the Department

appears to generally comply with its licensing time frame rules, it needs to ensure that it renews dealer li-censes in a timely manner. These licenses allow retail sales outlets to sell fishing and hunting licenses, and hunting tags, and should be issued by the Depart-ment within 30 days of receiving a completed applica-tion. However, auditors reviewed a random sample of 29 dealer files and found that year 2000 renewal li-censes were issued late in 17 cases. In 7 other cases, timeliness could not be determined because staff did not date-stamp the license applications.

3. The extent to which the agency has operated within

the public interest.

Although the Commission and Department have gener-ally operated in the public interest, they need to be more accountable to the public and the Legislature for Heritage Fund expenditures and management. The Commission and Department are responsible to the general public, and also serve a large number of special interest groups, including hunters, anglers, conservation and environ-mental organizations, and other government agencies. To gauge its progress, the Department regularly surveys the general public, as well as hunters and anglers.

Projects that the Department and Commission have de-veloped to serve the public include a variety of recreation, information and education, and public safety programs. Recreation and education programs include the Depart-

Sunset Factors

28


ments Urban Fishing Program, wildlife viewing semi-nars, fishing clinics, and its nationally recognized Hunter Education Program. In addition, the Department helps to ensure public safety by enforcing hunting laws and re-moving potentially dangerous wildlife, such as bears, from urban areas. The Department has also established a watercraft registration, enforcement, and boating safety program.

The Department and Commission need to take steps to ensure that the Heritage Fund is managed in the publics interest (see Auditor General Report No. 01-09). Specifi-cally, the Commission needs rules to guide its Heritage Fund property acquisition program. It also needs to adopt rules or other formal criteria, such as substantive policy statements, to ensure the expenditure of other Heritage Fund monies is appropriate. Since the Heritage Fund was established in 1990, the Department has re-ceived approximately $92.7 million, but has written rules for spending only a small portion of these monies. With-out rules or other formal criteria, it is difficult to deter-mine whether expenditures meet the intent of the Heri-tage Fund. For example, it is not clear whether a Depart-ment-funded television program is an appropriate use of monies designated to identify, inventory, protect, acquire, and manage sensitive habitat.

In addition, the Department does not adequately account for Heritage Fund monies. Currently, the Heritage Fund has a total balance of approximately $20 million but the amount of monies belonging to each of the five Heritage Fund programs is uncertain. Further, the Department has used these monies to pay for activities that should have been paid for from other funding sources. Although these loans have since been repaid, there is no statutory provi-sion that allows Heritage Fund monies to be lent.

Finally, the Department could better enable the public and Legislature to assess its efficiency and effectiveness by increasing the amount of information presented in its annual Heritage Fund report. The annual report currently does not contain sufficient information to enable the pub-

Sunset Factors


lic and Legislature to determine whether the Department has complied with statutory spending limits, how much was spent for various projects, and whether progress has been made toward goals or objectives.

4. The extent to which rules adopted by the agency are

consistent with the legislative mandate.

According to the Governors Regulatory Review Council (GRRC), the Commission has promulgated most, but not all, of the rules necessary to carry out its statutory respon-sibilities. GRRC determined that the following additional rules are needed:

Rules that clarify what proof of age and residency is

required for applicants requesting a lifetime license or trout stamp pursuant to A.R.S. 17-335.01(E). Accord-ing to GRRC, even though the Commission has not experienced difficulties regarding proof of age and residency, since Department employees routinely ask applicants for identification that indicates age and ad-dress, a rule covering clarification of type of proof should be initiated.

Rules that outline the requirements to obtain a fishing

license.

Rules regarding the Commissions decision to enter into agreements with landowners or agencies. Ac-cording to the Department, the only rule regarding the expenditure of funds is R12-4-123, which is a gen-eral rule applicable to the numerous funds under the Departments control.

Rules that prescribe procedures for use of Department

personnel, facilities, equipment, supplies, and other resources in assisting search or rescue operations at the request of the Director of the Division of Emer-gency Management.

Sunset Factors

30


Rules that provide directions for ensuring that a wa-tercraft owners certificate of registration number bears the holders correct address.

Rules that determine which criteria the Department will use to decide whether to revoke the numbers and decals issued to a watercraft involved in a violation or any other watercraft owned by a convicted person.

Rules that prescribe grades, qualifications, and salary schedules for Department employees.

Further, as mentioned previously, the Department should promulgate rules or develop other formal criteria to guide how it spends Heritage Fund monies.

5. The extent to which the agency has encouraged in-

put from the public before promulgating its rules and regulations, and the extent to which it has informed the public as to its actions and their expected impact on the public.

According to Commission and Department officials, the agency has encouraged public input in revising and de-veloping its rules. For example, Commission meeting agenda notices are mailed to individuals, groups, the media, and other government agencies. The public is also notified through print and electronic media such as news releases, articles in publications such as Arizona Wildlife Views, and through the Departments Internet Web site. During Commission meetings, time is also provided for public input on proposed rules and other actions. Addi-tionally, special public meetings are occasionally held statewide to allow public input on specific issues.

6. The extent to which the agency has been able to in-

vestigate and resolve complaints that are within its jurisdiction.

The Commission and Department have the authority to investigate and resolve complaints that are within its ju-

Sunset Factors


risdiction. Complaints involving serious violations, such as wildlife poaching, are directed to Operation Game Thief (OGT), a 24-hour telephone hotline. OGT has a computerized complaint tracking system that enables the Department to track the complaint from the initial phone call to its final disposition. According to Department offi-cials, this hotline has developed into one of the most suc-cessful programs of its type in the nation. In 1999, accord-ing to Department officials, OGT received 811 calls re-garding wildlife violations, with the majority of calls re-porting violations against big game animals, migratory birds, aquatic and other wildlife, and small game animals. Further, the Department reports that in 1999, OGT paid 32 cash rewards totaling $7,780. Department officials be-lieve that OGT is successful because of its 24-hour avail-ability, the callers ability to speak with someone immedi-ately, and the fact that Arizonas border states can also use the hotline to report wildlife violations occurring in Arizona.

The Department also receives a large variety of other calls, including concerns about bears in urban areas or in-quiries about how to remove nuisance wildlife, such as skunks or javelinas. According to Department officials, the Department accepts and handles these calls at the lowest level possible throughout the agency.

7. The extent to which the attorney general or any other

applicable agency of state government has the au-thority to prosecute actions under the enabling legis-lation.

The Department and Commission are currently repre-sented by two full-time Assistant Attorneys General who assist with enforcing the provisions of A.R.S. Title 17. Under A.R.S. Title 17, the Commission can revoke hunt-ing and fishing privileges and can assess fines and civil penalties for persons convicted of violating its statutes. In addition, County attorneys offices prosecute criminal ac-tions outlined in A.R.S. Titles 5, 17, and 28, such as boat-ing while intoxicated, poaching, and misusing firearms. These titles also prescribe penalties for criminal actions.

Sunset Factors

32


8. The extent to which the agency has addressed deficiencies in the enabling statutes that prevent it from fulfilling its statutory mandate.

Several legislative changes made over the past two years have enabled the agency to better carry out its mission. For example, legislation passed in 1999 and 2000 enabled the Department to better compensate and retain staff through salary increases and changes in retirement rules. Other changes to statutes have included allowing parents to transfer a hunting permit or tag to a child, license fee increases, and provisions for protecting jaguars. Legislative issues currently being studied by the Depart-ment include:

Amending A.R.S. 5-349(C) and (E) to provide a

minimum value of property damage before a water-craft incident report must be filed with the Depart-ment; and

Amending A.R.S. 5-321(E) to allow outside vendors

to charge service fees for renewing watercraft registra-tions by telephone and the Internet.

9. The extent to which changes are necessary in the

laws of the agency to adequately comply with the fac-tors listed in the Sunset Laws.

This Sunset review and the Heritage Fund performance audit identified several statutory changes that the Legisla-ture should consider. This audit recommends that the Legislature consider establishing a formal resource man-agement task force to develop comprehensive manage-ment objectives for wildlife, particularly elk, and wildlife habitat. During the course of the audit, legislators and outside interest groups indicated that the Departments efforts to manage the number of elk in the State through public hunts have not addressed land manager and land user concerns. Issues generally relate to the Department being responsible for managing wildlife populations but not their habitat. Those who manage or own land, or who

Sunset Factors


share habitat with wildlife, have expressed concerns about damage that elk cause to fences and crops, and about competition between elk, cattle, and other species for available feed. A formal legislative task force that represents these interests, as well as the Department, could help address these issues (see Finding I, pages 9 through 17). In addition, the Department should seek amendments to A.R.S. 17-338 and 17-339 to establish enforcement op-tions, such as penalties and late fees, to be assessed against dealers who do not meet deadlines for reporting sales, remitting monies, or returning unsold licenses.

Finally, a 1991 Auditor General Report (No. 91-10) rec-ommended that the Legislature consider amending A.R.S. Title 5 to require that watercraft be titled and to es-tablish a fee to cover the cost. Although this change was not implemented, it still should be considered since titling establishes proof of ownership, discourages theft, and al-lows for liens to be recorded. Currently, 36 states title wa-tercraft.

10. The extent to which termination of the agency would significantly harm the public health, safety, or wel-fare.

Terminating the Commission and Department could pose some harm to the publics safety and welfare. The Commission and Department conduct a number of activi-ties designed to manage wildlife populations and regu-late watercraft. By eliminating the Commission and Department, the State would have no other entity to oversee wildlife management, preservation, and harvest. Without such an entity, wildlife may become overpopulated, or, alternately, the viability of wildlife for hunting, fishing, and other recreational activities, such as bird watching, may be threatened.

In addition, no other agency regulates watercraft opera-tion, with the exception of some limited county watercraft enforcement. The Department currently registers boats,

Sunset Factors

34


which helps protect owners interests. In addition, the Department provides boater education courses, and its officers patrol lakes to help ensure boater safety.

11. The extent to which the level of regulation exercised

by the agency is appropriate and whether less or more stringent levels of regulation would be appro-priate.

The audit found that the current level of regulation exer-cised by the Department and Commission is appropriate.

12. The extent to which the agency has used private con-

tractors in the performance of its duties and how ef-fective use of private contractors could be accom-plished.

The Department uses private sector contractors for a vari-ety of services. According to Department officials, the Department contracts for maintenance and janitorial ser-vices, major construction, security system monitoring, heavy equipment repair, engineering and land surveys, personal computer and copier maintenance, temporary staff, printing and publications, mail services, fleet main-tenance, and many other services. Auditors randomly se-lected and reviewed six contracts, and these appeared to have been properly developed, awarded, and renewed in compliance with the Arizona State Procurement Code. However, one of the contracts, which is for shooting range management, has not been properly monitored ac-cording to the contracts provisions. This ten-year contract is valid through 2006, and requires the Department to conduct annual performance audits beginning in 1997. However, auditors were able to locate only one such au-dit that was completed in 1998.


Agency Response


(This Page Intentionally Left Blank)

April 20, 2001 Ms. Debra K. Davenport Auditor General 2910 N. 44th Street, Suite 410 Phoenix, Arizona 85018 Dear Ms. Davenport: We have reviewed the revised preliminary draft report of the performance audit of the Wildlife Management Program at Arizona Game and Fish Department. In reference to your letter of April 13, 2001, we have attached our preliminary written response regarding the audit findings as outlined in the preliminary draft report. Our response includes the required statements regarding each recommendation in the report. Should you have any questions or comments, please contact Steve Ferrell at (602) 789-3276 or me at (602) 789-3278. Sincerely, Duane L. Shroufe Director DLS:bt Attachment

Department Response to the Report by the Auditor Generals Office

of the Wildlife Management Program at Arizona Game and Fish Department RESPONSE TO RECOMMENDATIONS FINDING: BECAUSE NO SINGLE AGENCY IS RESPONSIBLE FOR MANAGING BOTH ELK POPULATION NUMBERS AND HABITAT IN ARIZONA, CONFLICTS ARISE OVER THE NUMBER OF ELK THE DEPARTMENT MAINTAINS IN THE STATE, AND THE IMPACT THOSE ANIMALS HAVE ON LANDS OWNED AND MANAGED BY OTHERS RECOMMENTATION: The Legislature should consider establishing a small, formal, ongoing task force mandated with developing a comprehensive plan for managing forage with specific agreed-upon objectives, and for recommending methods for mitigating private property damages and public land forage competition between wildlife and cattle. The task forces membership could include legislators, representatives from the U.S. Forest Service, the State Land Department, the Department, landowners, ranchers, sportsmen, and scientists. The task force could also utilize the services of an Assistant Attorney General, legislative staff and agency staff in appropriate fields to complete its duties. RESPONSE: Since this finding and recommendation is to the Legislature the Department has no response. If the Task Force is established the Department is prepared to participate in whatever capacity is necessary. If the Task Force is established the Department recommends that their first task be to evaluate all of the past work that has been accomplished so that they are up to speed on all successes to date. FINDING: EFFORTS TO MANAGE RETAIL SALES AND COLLECT REVENUE ARE INADEQUATE RECOMMENDATIONS: The Department should further develop its computerized licensing database into a comprehensive, accessible source of up-to-date and billing information. The audit finding is agreed to and the audit recommendation will be implemented. The Department will have a program written to combine all the records for each dealer into a comprehensive source of up-todate payment and billing information. The Department has the ability to run monthly billing reports to determine if a dealer has not reported on a monthly basis.

2

The Department should ensure that needed manual records, such as dealers monthly sales reports, are appropriately date-stamped and maintained. The audit finding is agreed to and the audit recommendation will be implemented. Effective 07/01/00, the Department date stamps all incoming documents and each manual dealer file is maintained properly. The Department should seek amendments to A.R.S.17-338 and 17-339 to establish enforcement options, such as penalties and late fees, to be assessed against dealers who do not meet deadlines for reporting sales, remitting monies, or returning unsold licenses. The audit finding is agreed to and the audit recommendation will be implemented. The Department will seek amendments to A.R.S. 17-338 and 17-339 to impose penalties to be accessed against dealers who do not meet deadlines for reporting sales, remitting monies or returning unsold inventory. The amendment should include a specific time period for the completion of audits. The Department should establish and implement a policy stating the total amount of time, or the number of opportunities, that a dealer will be allowed to submit unsold licenses or payments before referring to the Attorney Generals Office for collection of outstanding monies. The audit finding is agreed to and the audit recommendation will be implemented. The Department now follows A.R.S. 17-338, 17-339 and A.A.C. 12-4-105 procedures and time frames for handling delinquent dealers. If the dealer does not comply with the time frames set forth and the amount owed is $500 or more, the account is sent to the Attorney Generals Office. If the dealer owes less than $500, a consumer credit report is filed with Credit Data Southwest. To help ensure delinquent dealers are identified quickly, the Department should program its computerized licensing database to identify dealers who have not submitted timely monthly sales reports and who have not responded in a timely manner to annual audits. The audit finding is agreed to and the audit recommendation will be implemented. The Department will have a program written to generate a consolidated informational report showing the licenses outstanding and the monies owed to the Department The Department has the ability to run monthly billing reports to determine if a dealer has not reported on a monthly basis. The Department will program the computerized licensing system to identify dealers who have not responded in a timely manner to annual audits.

Sunset Factors The Department would also like to comment on the quality and completeness of the Sunset Factors. Sunset Factor 2 Our response to the first bullet in this factor has been answered in the findings and recommendations above. The Department agrees with the recommendation in the second bullet. All applications for renewing license dealer licenses will be date stamped when they arrive and the date of the renewal will be entered on the application. The Department will ensure that the 30-day deadline is met.

3

Sunset Factor 3 Our response to the comments in th

Documents

State of Arizona Office of the Auditor General · 2017-12-21 · State of Arizona Office of the Auditor General ... tial information and specific recommendations to improve th e operations